Schools as Businesses: What comes first, the Students or the Profit?

Most people do not consider schools to be business organizations, yet we have various reasons to perceive them in this light. After all, in recent years, there is a rising tension between educational priorities and the pressure to improve financial performance. There is a growing number of profit-making charities and other organizations that do not necessarily hold the education of students as a governing principle. So, is the educational rationale taking a backseat, or is it the case that private schools are finding a way to get the best of both worlds?

Numbers game

Independent schools have several main sources of income, but among them, fees are the principal one. That is why the number of pupils or students serves as a top indicator of the financial health. Even schools funded by the governments now exhibit a high degree of autonomy when it comes to allocating funds and managing finances. But, being dependant on cash inflow of students can be volatile and risky, which is why some entrepreneurs steer away from the education sector.

The great clash

Today, there is an obvious shift towards marketization of education. This leads to the heated debate about the nature of these independent institutions: Are they first and foremost, the wardens of education or business organizations that seek profit in order to survive? Do they resemble retail stores or lean towards public schools and universities? Well, there are examples that prove that private school can be a profitable business venture, but also that education does not have to be sacrificed in the process.

Competitive edge

Another interesting dimension is that while many independent institutions enjoy all the benefits of charitable status (they are set up as charitable organizations), they also operate according to a corporate business model. Some of them also fund academies or strike partnerships with local and state schools to improve their bottom line. There are some other tactics to increase the appeal and market edge such as investing in extravagant facilities or improving teaching resources.

Hunting for profit

There is no shortage of other strategies of generating profit. For example, it is possible to capitalize on trading, off-shore franchises, and renting facilities. Besides that, remember that there is one great advantage about the school-as-a-business model: You can “sell” the same service (a conference, for example) to numerous people at the same time. The downside is that you need a lot of money upfront to set the school up and the profit does not kick in right away.

Growing pains

It should be mentioned that some strategies that seem commendable actually make financial sense and they raise the profile of schools, especially those that manage to entice top talent. Growing and promoting the school does not have to mean that students have better learning conditions or more resources at their disposal. On the other hand, this dependence on students’ money still means that schools cannot neglect the educational aspect. You could say that just like in retail, the quality of the product makes all the difference.

A wide spectrum of options

So, private schools do not spell doom for modern education or anything of that sort. Besides, students have a lot of options to choose from. Nowadays, one can find private tuition both on and offline, bypassing the brick-and-mortar schools and institutions completely. The internet has empowered them to assume more control over their educational path. Of course, you can always rely on the traditional public schools. The trick is to weigh the pros and cons and make a truly informed decision.

The shadow looms

The main problem that remains is that a business model compromises the ability of an organization to make decisions with the students’ best interest in mind. Hence, we cannot ignore the obvious clash of interest that exists. Mission statement and ethos are often overshadowed by financial merit. Take the example of some well-established schools that spend a pretty penny on celebrities to stay ahead of the pack in the marketing game. They are desperate to break in the competitive environment and gain a sustainable business edge.

Back to the basics

Independent schools need students and their money to avoid going under. All the profit-seeking inevitably intrudes upon the capacity of these organizations to preserve the consistency of education provision. The lines are blurred, but it is clear that much time, money, and effort is dedicated to promoting and marketing schools. The question is how much resources are left for fulfilling the main educational purpose of these schools. Well, we argue that the foundations of education must always come first, and everything else second.